Analysis sees U.S. falling behind on research gains

U.S. spending on research and development has led the country to become a global innovation powerhouse, but an analysis done by the Boston Consulting Group shows that the nation can do more to realize gains from such investment.

The United States remains dominant at the front end of R&D; the nation invests three times as much as any other economy in basic research, which focuses on the pursuit of scientific knowledge and applied research, which turns discoveries into technologies useful to industry.

But the United States looks different when it comes to the back end of the R&D chain — development research that translates new knowledge from basic and applied research into commercial products and new manufacturing processes.

China recently surpassed the United States as the biggest spender in that area. In another five years, China will be investing as much as twice as much as the United States on development research, assuming that both economies maintain their recent pace of spending growth.

“Our analysis indicates that there is significant potential for the U.S. to generate much more product and process innovation from its investments in basic and applied research by streamlining existing ‘adapters,’ such as universities, for linking government-funded academic research to private industry,” the firm said. “U.S. research universities can accelerate product innovation by reducing friction and serving as better bridges between academia and industry.”

The private sector in the United States provides less funding for university research and development than other big manufacturing economies do, ranking fifth behind China (No.1), Russia (No.2), Germany (No.3) and South Korea (No. 4).

“We essentially are calling for improving the ‘software’ of the existing U.S. industrial innovation system, rather than adding expensive new ‘hardware’ in the form of new programs and bureaucracies,” the firm said.